EXHIBIT 10.8
December 9, 1997
Xxxxx Xxxxx
Mill Valley, California
Dear Xxxxx,
The following outlines the terms of the employment agreement between Cedro
Group, Inc. ("Cedro") and you.
1. You will be employed to work full time and exclusively for the Company.
2. Compensation. $7,500 per month. Effective upon venture funding of $1.5
million or more ("Venture Funding"), your salary will increase to $11,250 per
month. Venture Funding shall not include bridge financing and is subject to the
approval of the board.
2. Bonus. Upon Venture Funding, you will have the opportunity to earn up to
$50,000 bonus in 1998. Performance targets to earn the bonus will be determined
by the Company in the budget for 1998, and shall be attached to this agreement
as an addendum. You must be employed by Xxxxx at the time the bonus is payable
to be eligible to receive the bonus. The time during which performance is
measured may vary depending on when a Venture Funding occurs.
3. Options. Subject to approval by the Board of Directors of Cedro and
compliance with applicable law, 337,110 ISOs (post-split) within Cedro's 1996
Stock Option Plan will be granted at the start of the Term (see below). Options
are vested over four years, with 84,277 options vesting at the end of the first
year, and 7,023 options vesting each month thereafter. Vesting base date shall
be July 1, 1996. The exercise price per share will be the fair market value of
the options as determined by the Board of Directors. These options would
accelerate to be fully vested upon completion of an initial public offering
(IPO). These options would also accelerate to be fully vested upon completion of
an acquisition or merger of Cedro by or with another company where Cedro is not
the surviving entity ("Acquisition"), unless such acceleration would make the
Acquisition ineligible for the selected accounting treatment if such treatment
is material to the transaction. If any such options do not accelerate in
accordance with the foregoing, and you do not receive and accept fully vested
replacements therefor, then Cedro will use reasonable good faith efforts to
provide you shortly after the close with compensation comparable to any
reduction in the total profit you would otherwise have earned on such unvested
options.
4. Secondary Grant of Options. Subject to approval by the Board of Directors of
Cedro and compliance with applicable law, 235,000 ISOs (post-split) within
Cedro's 1996 Stock Option Plan will be granted at the start of the Term (see
below). Options are vested over four years, with 58,750 options vesting at the
end of the first year, and 4,895 options vesting each month thereafter. Vesting
base date shall be July 1, 1997. The exercise price per share will be the fair
market value of the options as determined by the Board of Directors. Upon
completion of a Venture Funding, any unvested options that would otherwise
vest during the first two years of the four year vesting schedule shall
accelerate to be fully vested and the balance of the options shall vest in
accordance with the original schedule during the last two years of the four year
vesting schedule.
5. The "Term" of the agreement will begin on October 1, 1997.
6. Health insurance shall be provided for you and/or your family by Cedro for
the duration of your employment with Cedro should you desire it. Medical,
vision, and dental coverage under Xxxxx's policy are included in this benefits
package. Your portion of the cost for four family members is $115.45 per month
and is subject to change.
7. You will accrue paid vacation days at a rate of one and a half (1.5) days
per month of employment. Maximum vacation accrual is 15 days. You will accrue
paid family and sick leave at a rate of one-half day (1/2) per month of
employment.
8. You will initially report to Xxxxx Xxxxxx, President or such other person as
the President designates.
9. Your initial responsibilities will be to grow and manage the Multi-Brand
Store business and assist in strategic business development for the company.
Within these areas, your responsibilities will include profit and loss
accountability, human resources (hiring, termination, reviews, compensation),
budgeting, and planning for divisional operations.
10. Your initial title will be Vice President of Business Development and
General Manager of Multi-Brand Stores.
11. Cedro may alter your title, supervisor, responsibilities and duties from
time to time as it deems appropriate.
12. Your employment with the Cedro is at-will and can be terminated or modified
at any time, with or without cause, at the option of either you or Cedro.
Cedro's right to terminate your employment includes the right to reduce the
scope of you duties and responsibilities and the amount of your compensation.
13. Except as otherwise provided in this paragraph, upon the termination of your
employment with Cedro you shall immediately cease to accrue salary, vacation,
benefits, vesting of stock options and all other compensation. If you are
terminated by Cedro other than for Cause prior to December 31, 1998 you will be
entitled to the following:
. for the period ended twelve weeks following the week in which you were
terminated you will be entitled to receive you then current salary, then
effective medical benefits for you and your family, and continued vesting
of stock options.
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. you will also be entitled to accelerated vesting (i) under paragraph 3,
if prior to your termination Cedro has received a bona fide written
proposal for an Acquisition from another company and prior to the end of
the twelve week period Cedro closes the Acquisition with such company,
and (ii) under paragraph 4, if prior to your termination Cedro has
received a bona fide written term sheet for a Venture Financing from a
potential investor and prior to the end of the twelve week period Cedro
closes a Venture Financing with such investor.
"Cause" means (a) your failure to satisfactorily perform your duties and
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obligations of employment, as the same may be altered by the Cedro from time to
time, which are not remedied in a reasonable period of time after receipt of
written notice from the Cedro, (b) your conviction of a felony or your theft,
embezzlement, fraud, dishonesty, misappropriation, or conversion of funds or
property of Cedro, (c) your breach of any agreement with the Cedro or your
inducement of any customer, consultant, employee, or supplier of the Company to
breach any agreement with the Cedro or to cease or adversely change its business
relationship with the Cedro, or (d) your breach of a fiduciary duty owing by you
to Cedro or your commission of an act that is intended, or that would reasonably
be foreseen, to cause in material harm to the goodwill or reputation of Cedro.
14. Except for agreements relating to your obligations with respect to
intellectual property, this agreement constitutes the entire agreement
respecting your employment with the Cedro and supersedes the terms of any other
prior or contemporaneous oral or written offers or agreements relating to your
employment. This agreement shall not be changed except in a writing signed by
the parties. No waiver shall be binding unless executed in writing by the party
making the waiver. No waiver shall be deemed a waiver of any other provision or
constitute a continuing waiver.
15. The parties shall use reasonable good faith efforts to resolve any dispute
by negotiations or mediation. If negotiation and mediation fail, any party may
submit any dispute concerning this agreement to final and binding arbitration
pursuant to the commercial rules of the American Arbitration Association.
Arbitration shall take place in a neutral, mutually convenient location / Santa
Xxxxx County, California. At the request of any party, the arbitrators,
attorneys, parties to the arbitration, witnesses, experts, court reporters, or
other persons present at the arbitration shall agree in writing to maintain the
strict confidentiality of the arbitration proceedings. Arbitration shall be
conducted by a single, neutral arbitrator or, at the election of any party,
three neutral arbitrators, appointed in accordance with the commercial rules of
the American Arbitration Association. The award of the arbitrator shall be
enforceable according to the applicable provisions of the California Code of
Civil Procedure, sections 1280 et seq. Notwithstanding the foregoing, a party
may apply to a court of competent jurisdiction / the arbitrator for prejudgment
remedies and emergency relief in the form of a temporary restraining order
pending final determination of a claim through arbitration in accordance with
this Section. The parties shall share the costs of arbitration equally. The
arbitrator shall not have the power to award punitive, consequential, indirect,
or special damages.
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If you are in agreement with the terms of this offer, please sign below to
indicate your acceptance.
We are looking forward to continued successes and growth with you.
Best Regards,
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
President
Accepted:
/s/ Xxxxx Xxxxx 12/9/97
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Xxxxx Xxxxx Date
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